UK Blocks Microsoft / Blizzard Merger

[Skildar]

So after China also allowed the merger it seems we have part of the strategy for Microsoft's appeal of the CMA's decision.
https://twitter.com/FOSSpatents/stat...531482121?s=20
One of the Senior Directors of the CMA that was directly involved in the decision formerly worked for a law firm representing SONY. If true, they just got themselves a solid case for conflict of interest.

I'm not not sure that would be enough. He wasn't personnally damaged by microsoft or doesn't have any stakes in the competition. He acted as a representative at a time and today he has other responsibilities.

The CMA claims seem reasonable to me and if their government is backing them I guess it means that they have shown sufficient evidence of preparation, investigation and negotiation with Microsoft. Only a handful of countries voted against lootbox mechanics and I still think that more should have followed this decision. Being the only one who's made a specific choice doesn't make you wrong. It is risky and from the parliament video that was linked in the chat, it has been acknowledged

[Nymrohd]

I'm not not sure that would be enough. He wasn't personnally damaged by microsoft or doesn't have any stakes in the competition. He acted as a representative at a time and today he has other responsibilities.

The CMA claims seem reasonable to me and if their government is backing them I guess it means that they have shown sufficient evidence of preparation, investigation and negotiation with Microsoft. Only a handful of countries voted against lootbox mechanics and I still think that more should have followed this decision. Being the only one who's made a specific choice doesn't make you wrong. It is risky and from the parliament video that was linked in the chat, it has been acknowledged

In the context of professional standards it does not take a lot to show a conflict of interest. I am not saying this will be successful, just that it is an indication of their grounds for an appeal. Imo the crucial thing is what will happen with the FTC. If they manage to resolve their issues with the US regulator and the UK ends up standing alone, the pressure will be significant.

As for their claims, meh. Small companies cannot compete on this field. The investment required in hardware is just a significant barrier to entry. Cloud gaming will be the province of tech giants. The reason some companies like Sony cannot compete is not Microsoft's dominant position, it's that they have made no effort or investment.

[Skildar]

In the context of professional standards it does not take a lot to show a conflict of interest. I am not saying this will be successful, just that it is an indication of their grounds for an appeal. Imo the crucial thing is what will happen with the FTC. If they manage to resolve their issues with the US regulator and the UK ends up standing alone, the pressure will be significant.

As for their claims, meh. Small companies cannot compete on this field. The investment required in hardware is just a significant barrier to entry. Cloud gaming will be the province of tech giants. The reason some companies like Sony cannot compete is not Microsoft's dominant position, it's that they have made no effort or investment.

absolutely however right the uk cma could be, if they are the only one saying no they will loose power in negotiation.

I never understood why there has ever been such a focus on sony in this merger. Every opportunity they've had to make competing titles of activision blizzard games they have failed. Every opportunity they've had to expand their platform services they botched, portable consoles, vr development (my take subjective on this one), cloud gaming.

[Nymrohd]

absolutely however right the uk cma could be, if they are the only one saying no they will loose power in negotiation.

I never understood why there has ever been such a focus on sony in this merger. Every opportunity they've had to make competing titles of activision blizzard games they have failed. Every opportunity they've had to expand their platform services they botched, portable consoles, vr development (my take subjective on this one), cloud gaming.

I'd say the main reason Sony seemed in focus was that gaming media absolutely wanted to cash in on clickbait console war articles.

Part of the problem is that early on a lot of gaming media reported the CMA practically parroting Sony views. Their early statements were just in complete agreement with the Sony position before they pivoted to making the central issue Cloud Gaming. So if that conflict of interest is valid it does make you wonder if the entire claim is valid or not.

The real issue to oppose this should always have been that acquisitions of functioning studios are anti-consumer. Microsoft could have used this money to create strong studios internally, create new IPs or support its existing studios. Instead it is using them to line up the pockets of ATVI stockholders and it is very much uncertain if any of the massive goodwill accounted for in the extraordinary merger offer will ever result in more resources for development. The only argument that could be made on why this is not anti-consumer would be if ATVI was on the verge of shutting down and taking down important IPs with it but this is absolutely not the truth. ATVI is fucking its IPs up imo but not because of lack of resources nor is it in danger as a company. And more importantly, none of the regulators care about this issue.

However the competition authorities don't give a shit about consumers. Their concern in competition is entirely about preventing monopolies and enforcing anti-trust (they do not mind oligopolies at all) and that's so they can enlarge local industrial sectors and keep unemployment low and trade balance positive; not because of any effect it has in consumer prices. Which is fine but it doesn't concern me nearly as directly.

[rhorle]

I'd say the main reason Sony seemed in focus was that gaming media absolutely wanted to cash in on clickbait console war articles.

Is it cashing in on clickbait when Sony has involved themselves? ABK even claims that a Sony executive said they don't want a licensing deal, what would cover their concerns of exclusivity, because they want the merger to fail.

[Tech614]

So after China also allowed the merger it seems we have part of the strategy for Microsoft's appeal of the CMA's decision.
https://twitter.com/FOSSpatents/stat...531482121?s=20
One of the Senior Directors of the CMA that was directly involved in the decision formerly worked for a law firm representing SONY. If true, they just got themselves a solid case for conflict of interest.

It would be a bad claim to make since the CMA dropped their concerns over the console market(and thus this deal's effect on Sony) before they ever blocked it.

MS has to argue against the cloud market having fast growth soon like the CMA thinks it will, as well as argue against the cloud market being reliant on them providing CoD. This ain't it, this is just more twitter console warrior conspiracy shit.

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Is it cashing in on clickbait when Sony has involved themselves? ABK even claims that a Sony executive said they don't want a licensing deal, what would cover their concerns of exclusivity, because they want the merger to fail.

Why would Sony want a complete show 10 year deal in the first place? There is a reason why MS was only able to sign those deals with people that didn't have CoD to begin with. Lulu can get her panties in a bunch all she wants because Jim Ryan called the deal what it was, it's not Sony's job to help their merger PR.

[rhorle]

Why would Sony want a complete show 10 year deal in the first place? There is a reason why MS was only able to sign those deals with people that didn't have CoD to begin with. Lulu can get her panties in a bunch all she wants because Jim Ryan called the deal what it was, it's not Sony's job to help their merger PR.

No one said it was Sony's job only that they have been heavily involved with the opposition to the deal. Sony has came out to say that any deal with the CMA couldn't be enforced or monitored so it needs to be rejected completely. It isn't clickbait to point that out though since clickbait exists for pretty much everything these days I'm sure some where only that.


As for the deal why wouldn't Sony want what they claim the merger will remove? They maneuvered themselves into a corner as Microsoft offered what they first claimed would be an issue. Then they had to move the goal posts to other issues including claiming Microsoft would be slow to patch (or deliberately introduce bugs) to playstation versions of their games.

[Edge-]

So after China also allowed the merger it seems we have part of the strategy for Microsoft's appeal of the CMA's decision.
https://twitter.com/FOSSpatents/stat...531482121?s=20
One of the Senior Directors of the CMA that was directly involved in the decision formerly worked for a law firm representing SONY. If true, they just got themselves a solid case for conflict of interest.

https://www.reddit.com/r/XboxSeriesX...eb2x&context=3

These ‘hit articles’ need to be listed as what they actually are which is just corporate propaganda.

The guy in question is Colin Raftery, who works for a few years at Cleary Gottlieb. He worked there over a decade ago. He was not a partner, nor did he work on anything Sony related

Cleary is a giant company spanning thousands of attorneys and almost every major type of law - and the likely hood that someone has worked for them and also works in governmental regulation is not small - as it’s what the socialize in.

The CMAs board, which is where Raferty sits, did not even have him involved in this litigation. His position on the board is outlined within their procedures

It’s worth noting that another member of the board worked directly with Microsoft on multiple cases - including the Bethesda merger yet isn’t brought up.

Cordon, and the entirety of the windows central editorial team suck. They make these articles for hate clicks and based on the commentary here it works.

Links within for some of the sauce. Jez is a really dogshit source.

[Edge-]

And just like that, the "conflict of interest" is gone.

Jez fuckin' Corden... Christ, can we not?

Apparently the lawfirms more serious work with Sony is in the past 5 years, which is after that dude left (10 years ago).

Jez just found that he gets tons of clicks and social posts and replies for posting pro-Microsoft anything in relation to this deal right now and is riding that. Folks reading gaming media are increasingly dumb as shit and reward really bad/unreliable/shit-tier "insiders/leakers" who they simply agree with. If there wasn't an audience desperate for people to have someone "official" support/reinforce their views he would still be banging out 300-wrapper news stories on "latest press release that landed in my inbox/was assigned by my editor."

[Nymrohd]

Jez is a really dogshit source.

Yeah that's worse than bad, sorry. Should have seen it was Windows Central obv it will just be biased. What happens when you are browsing what your phone recommends on the toilet . . . fake news and hemorrhoids.

Still interested to see what they will base their appeal on.

[Tech614]

Still interested to see what they will base their appeal on.

The only thing they can base their appeal on is arguing cloud is not a separate market from traditional gaming. The data is not in their favor as long as this definition stands, if they try to argue anything else the CAT will just uphold the CMA because everything else is in their legal jurisdiction numbers wise. Even with a successful appeal of that it still go's back to the CMA who now has to re-evaluate the deal from scratch again under the definition of cloud being the same market.

It's going to be a very, very long and tedious process if they bother to go through with this. They also have to renegotiate the deal with ATVI in the mean time on top of this year+ long appeal process.

[Nymrohd]

So we now have Microsoft's claims to the tribunal.
https://www.videogameschronicle.com/...oud-streaming/
the CMA made errors in assessing Microsoft’s position in cloud gaming services by “failing to take account of constraints from native gaming”
the CMA failed to take account of three long-term commercial agreements Microsoft has entered into with cloud gaming providers
the CMA’s claim that Activision would have likely made its games available on cloud services without the merger was “irrational and arrived at in a procedurally unfair manner”
the CMA’s claim that Microsoft would have the ability and incentive to ‘foreclose’ rival cloud gaming services by withholding access to Activision games was “unlawful”
overall, the CMA’s decision was a “breach” of its “common law duty of fairness” and its own “remedies guidance”.

Mostly sounds like whining than actual arguments to be fair. I am sure they will be able to find some problems with the CMA's math though. No side seemed to have their math right from what I gather.

[Tech614]

Only the first one is worth arguing and the rest of the points are to stall and confuse the court at best. 2nd point is especially hilarious because they did in fact take it into account and the CMA just doesn't do behavioral remedies because they have no jurisdiction to enforce them, they can only block or approve the merger in the first place they can't police what MS does after the fact.

[Nymrohd]

To be fair I also think there is no certainty ATVI would offer their games to cloud services. The Blizzard division in particular is very protective of having its own space to distribute their games through Battle.net. Have they even considered offering legacy title remasters like Refunded and Resurrection?

[Tech614]

If cloud becomes a viable market to sell your games on, yes ATVI and every other 3rd party will be selling their games on cloud services. It's absolute absurdity to argue otherwise. If you have a PC version of a game you already have a cloud version of that game, it would be free money if it becomes a larger market. Geforce Now literally had ATVI games on it while in beta and was already negotiating to have them in the commercial release long before the phony MS deal came along.

You could make that argument if it was Nintendo or some shit you where buying, but a large 3rd party only interested in making the most amount of money possible? lol.

[rhorle]

To be fair I also think there is no certainty ATVI would offer their games to cloud services. The Blizzard division in particular is very protective of having its own space to distribute their games through Battle.net. Have they even considered offering legacy title remasters like Refunded and Resurrection?

Activision Blizzard removed games from Geforce Now in 2020 when the service formally launched. They didn't seem opposed to having it on the cloud service but just couldn't reach an agreement with Nvidia. They weren't the only one to pull games from the service ahead of its launch.

[Nymrohd]

https://koreajoongangdaily.joins.com...120006778.html
Korea's regulator also approved the deal

I still think the CMA block is far more likely to stand than not and for the merger to fail because of it. But I also think that the CMA will end up in some form of independent review and defanged.

Edit: Oh SK ALSO calls their regulator FTC. lol

[Jtbrig7390]

So I only saw it on one site so far
https://koreajoongangdaily.joins.com...120006778.html
FTC seems to have given unconditional approval to the merger. The Brits stand alone.

I still think the CMA block is far more likely to stand than not and for the merger to fail because of it. But I also think that the CMA will end up in some form of independent review and defanged.

I don't see how some random site called Korea (long ass name) would have any true sources on what the FTC has decided, so I would take it with a massive grain of salt.

[Nymrohd]

I don't see how some random site called Korea (long ass name) would have any true sources on what the FTC has decided, so I would take it with a massive grain of salt.

Corrected it. Apparently Korea also uses the same acronym for its regulator.

I was mostly prompted to post this because of this article from FT anyhow
https://www.ft.com/content/b72bd1d8-...b-a4d415bcab03
CMA has blocked more than half the proposed mergers since 2018, went from 35%+ between 2013-2017 to 55%+ while changing its guidances in 2021 in a way that rejects the idea that mergers can create efficiencies.
Keep in mind, I think this particular merger has no notable efficiencies. If anything, I am not even sure it is good for Activision; it is great for the stockholders who get the payout and for Kottick who gets his golden parachute but there is no reason to believe much of this will be invested in the business. And I don't think MS will offer ATVI any particular operational advantage in the field.
But mergers that do improve upon the efficiencies of the individual units ARE good for competition, are not at all rare and a doctrine that opposes that is problematic. Plus when you block more than half the mergers and acquisitions, you are telling startups that often are created with the clear hope they can be acquired better seek a different place to incubate.

[Flame6]

Well Microsoft now has a date to appeal the CMA. Going to the Competition Appeal Tribunal in late July.

Be interesting to see how this shakes out

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https://www.reuters.com/markets/deal...al-2023-05-30/